hecking accounts are the revolving door of personal finance. As your paycheck comes in, your Visa bill, mortgage payment, or automated teller machine (ATM) withdrawals whisk the money right out.
When that revolving door gets jammed by bounced checks or transaction limitations, odds are you'll feel it where it hurts--your wallet. If you ask the following questions when shopping for share draft/checking accounts, you'll save yourself frustration, time, and money. In fact, even if you weren't planning to shop, checking account fees many banks are imposing these days may make you reconsider. Perhaps this is a perfect time to re-evaluate your checking options<!--this is a good place to link to your share draft or checking services--!>.
Does the institution offer several checking options?
"Most people are not aware that banks have four or five different checking accounts," says Edward Mrkvicka Jr., a former bank chief executive officer and author of "Your Bank Is Ripping You Off" (ISBN: 0-312-15246-9). Common accounts include:
|Is a free checking account available?
Many institutions advertise free checking. However, only one of 12 banks actually offers it, says Michael Moebs, chairman of Moebs $ervices in Lake Bluff, Ill. Moebs reports to Congress annually on the use of the term "free" by financial institutions.
According to the Truth in Savings (TIS) Act, a checking account is truly free if it requires:
Many financial institutions offer free checking to the elderly, disabled, or students. Why haven't you heard of this before? "Banks don't advertise it," says Mrkvicka. "You have to ask for it."
advertise free checking,
but only one out of 12
actually offer it.
on the rise,
| What are the fees?
TIS generally requires that interest and fee information be included in any periodic statements sent to you. You may be charged for:
|What is the institution's check-hold policy?
You can save yourself bounced-check fees by understanding your institution's check-hold policy. Ask these questions:
| "Business days"
are different from
|Which account best suits your habits?
To find the account that's best for you, examine your money management habits.
Surprisingly, seven of eight people don't balance their checking accounts monthly, says Moebs. That's asking for trouble. At minimum, each month check your statement and confirm all deposits, ATM transactions, and large withdrawals. If anything looks amiss, check with your financial institution right away.
And be sure to record ATM and debit transactions in your share draft/check register in a timely way.
Once you choose your account, handle it responsibly. You'll keep that convenient revolving door in motion and get the most out of your money.
As you compare checking accounts, remember that credit unions are more likely to offer checking accounts (called share draft accounts) with a lower minimum balance, higher dividend rate, or no service fees<!--this is a good place to link to your checking/share draft services--!>, says Mrkvicka.
| Credit unions are
more likely to offer
share draft/checking accounts
with a lower minimum balance,
higher dividend rate,
or no service fees.
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Investment Style Auto Transplants?
Consumer Choice Fast Facts
|©1998 Credit Union National Association, Inc.